Idaho has room to grow as a top U.S. dairy state

Editor’s note: As part of our series, “From Cow to Curd: A Look Across the Nation,” Cheese Market News takes a look at the cheese and dairy industry across the United States. Each month we examine a different state or region, looking at key facts and evaluating areas of growth, challenges and recent innovations. This month we are pleased to introduce our latest state — Idaho.

By Rena Archwamety

MADISON, Wis. — Idaho may be famous for its potatoes, but it also is a formidable dairy state, ranking just behind California, Wisconsin and regularly alternating ahead or behind New York when it comes to milk production. In 2017, Idaho’s 600,000 milk cows on 490 family-owned dairies produced a total of 14.63 billion pounds of milk according to USDA’s preliminary estimate.

Dairy is Idaho’s No. 1 agricultural revenue producer, accounting for about a third of the state’s ag revenue, according to Eric Bastian, vice president of industry relations for Dairy West, a regional checkoff-funded organization that encompasses Idaho and Utah.

“It’s an active, dynamic industry,” Bastian says. “We’ve got a full range, from very large processing to real small, artisanal processing in the state.”

Among the state’s major cheese processors are Glanbia Nutritionals, which operates four plants in Blackfoot, Twin Falls, Gooding and Richfield, Idaho, handling about a third of the state’s milk; Gossner Foods, which is headquartered in Utah but also has a cheese plant in Heyburn, Idaho; Sorrento Lactalis, which has a large cheese and whey factory in Nampa, Idaho; and Agropur’s Jerome Cheese facility in Jerome, Idaho.

Two major Idaho dairy ingredient processors, High Desert Milk in Burley and Idaho Milk Products in Jerome, are vertically-integrated, producer-owned facilities. And Chobani chose Twin Falls to build the “world’s largest yogurt plant,” which it currently is expanding further to include a new gathering space, fitness center and visitor’s entrance.

“Glanbia has been in Idaho 30 years now, and the dairy industry has allowed Glanbia to grow here in Idaho just as it has other processors,” says Russ De Kruyf, director of Idaho milk procurement, Glanbia Nutritionals, and president of the Idaho Milk Processors Association (IMPA). “Over the past 30 years, the dairy industry has grown hand-in-hand with the processing industry. Idaho has grown up really as a commodity state, with bulk commodity dairy products. There’s a little bit of movement toward value-added niche products, though commodity style is still our bread and butter.”

• Dairy friendly

Idaho is an ideal place for dairy production, De Kruyf says.

“We’ve got 300 days of sunshine and 10 inches of moisture a year. It’s a high-desert, low-humidity climate,” he says. “We have some of the best-quality milk in the United States and a great processor community. Our dairymen have lots of good options.”

Bastian adds that Idaho’s quality milk supply has helped grow the state’s dairy processing industry.

“Volumes are very good, and the quality of milk is bar-none. You start looking at things like somatic cell and plate count, they are superb,” he says. “Because the milk supply is here, dairy processors have grown as the supply has grown. Some have moved in, and some have been on the ground here for many years.”

Rick Naerebout, CEO, Idaho Dairymen’s Association, explains there are three main milksheds in Idaho.

Magic Valley, the main milk-producing region around Twin Falls, is home to about 60 percent of the dairies and about 72 percent of the state’s cows, with an average herd size of just more than 1,400 cows. Treasure Valley near the Boise area has about 20 percent of the dairies and 20 percent of the cows, with an average herd of about 1,300 cows per dairy. Eastern Idaho, which Naerebout says resembles Midwest and Eastern dairy states more than the rest of Idaho, has about 20 percent of the dairies but less than 10 percent of the cows and an average herd size of just 300.

“One of the main attractions here is the dry, arid climate and comfortable environment for the cows.

When the industry started to grow here in the 90s, we had very affordable land — it still is quite affordable. We grow great forages and have a pretty stable water supply,” Naerebout says.

“At the end of the day, Idaho also has a very business-friendly environment for dairy producers and processors as well. The state government moves at the pace of business,” he adds. “Chobani is a great example. They went from concept to running milk in 326 days. The state provides the oversight necessary ... protecting the environment and consumers, but not doing it in such a way that dairymen feel is overly-burdensome.”

While it may be third or fourth in the nation for milk production, Idaho, with a population of 1.7 million, is No. 1 in milk production per capita.

“If everyone in Idaho consumed all the cheese produced in Idaho, it would be around 500 pounds per capita per year,” Bastian says. “Most of these products are shipped outside the state, and there’s a significant amount of (international) export. In past times, we didn’t export a lot of cheese, but that’s increased significantly the last five to six years.”

While Idaho currently accounts for only 6.9 percent of U.S. dairy exports, that number has grown from about 5 percent in 2014 and contributes significantly to the state’s bottom line, according to Dairy West CEO Karianne Fallow. In 2016, Idaho’s $336 million in dairy exports generated more than $735 million in economic activity in the state.

“Idaho’s dairy farmers not only feed families here in Idaho, they help feed the world,” Fallow says. “As Idaho looks to grow demand for our dairy foods, exports will undoubtedly play an increasingly important role.”

• Collaborative projects

Both Idaho Milk Processors Association and Idaho Dairymen’s Association were founded in the 1920s, and Naerebout says one of the Idaho dairy industry’s strengths is the working relationship between its producers and processors.

“We have a long history of working together,” he says. “If a certain piece of legislation is moving, we will typically check in with the processors, and if we both can agree on it, we’ll go to Congress with a dairy delegation as a whole. Immigration reform is a great example, where the processors are with us, advocating for immigration reform and making sure something reasonable happens on that front.”

Recently the state’s dairy industry has come together to implement the new Idaho Dairy Worker Training and Safety Program. Funded 50 percent by producers and 50 percent by processors, the new program launched last summer and focuses on fostering safe working environments for dairy farm employees.

“The genesis of it was customers of dairy asking our industry questions about what we’re doing at farm levels for training employees and providing a safe working environment,” Naerebout says. “We have training programs, but there wasn’t a good system in place to document those trainings. We wanted to have a program where we could go back to the customers and consumers to show we have a process in place.”

De Kruyf notes that Idaho’s dairy industry also currently is working closely with the University of Idaho on a proposed new dairy research center called CAFE — Center for Agriculture, Food and the Environment. The proposed center would be a consortium of universities, government agencies, private-sector representatives and NGOs, led by the University of Idaho, to serve as a catalyst for research, outreach and education to advance sustainability of dairy/livestock production and food processing in Idaho. The center would be located in the Twin Falls area, where it would house university faculty and staff as well as collaborators and appropriate research laboratories and classrooms. It also would have a research dairy and food processing pilot plant.

“We as processors and dairymen are working collaboratively with the university to see what’s the best location and the research it’s going to do,” De Kruyf says.

• Potential growth

With a current oversupply of milk in Idaho and across the nation, producers are hoping for more processing capacity to be built in the state. Naerebout says in the last few months, up to four facilities and just shy of 8,000 cows had to be sold off because there was not a market for that milk.

“There’s some kicking tires and looking — definite interest from some companies out there who are starting to look and see the value Idaho brings,” he says.

Bastian says Idaho has the potential to grow its dairy industry significantly, and many dairy producers also would like to expand.

“Right now the challenge is for many of them to find a home for their milk, but I can only imagine that would drive more expansion,” he says. “The potential is there if the current pricing and stock situation is corrected. We have much more room to expand in the region.”

As Idaho’s dairy industry continues to expand and evolve, its profile has remained low, but De Kruyf says that’s how the industry likes it.

“Though Idaho’s license plate says “Famous Potatoes,” we’re OK with that,” he says. “As long as people put cheese and sour cream on their baked potato, we’re fine.”

CMN

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